In the financial services industry, a professional providing financial advisory services for fee-based or managed accounts has discretion over the price (i.e. the professional's fee) charged to the client for the professional's services. Ultimately, the price charged by the professional must be within the market-acceptable boundaries, or clients will go elsewhere. However, if the price charged is too low, the professional may not be earning the maximum amount of per account revenue available to the professional.
While the discretion over pricing allows professionals much freedom to reward client loyalty, or encourage new business or more desirable business, many financial advisors with such discretion find it a source of difficulty and frustration. In practice, many of these professionals do not have a reliable sense of how they themselves price their services relative to others and are uninformed as to the actual pricing behavior of their competitors (even within the same firm). Ideally, a professional should be able to charge a client “what the market will bear” but this is difficult without accurate and up-to-date information on the state of the market. There is also pressure on professionals or particular firms to maximize revenue by charging higher prices. However, with little reliable guidance, it is difficult for a professional to know how to adopt a pricing strategy that is revenue-maximizing, bearing in mind his own client, asset and product variables, as well as, being competitive with the professional's peers.
Transaction pricing information has started to become available. Professionals can now use reports of their past pricing behavior for transactions and evaluate their pricing against prices charged by their peers (e.g. U.S. Pat. No. 7,028,006) or against reference prices based on historical transaction data (e.g. US Published Patent Application No. 2008/0097886 A1). However, it would be desirable to make comparison data for fee-based and managed accounts available in a simple visual format. This would further allow the professional to evaluate the proposed pricing in light of the specifics of the account and comparison data with similar historical (i.e. existing) accounts and consider various pricing (fee-setting) scenarios.